Mr Rudd announced in Sydney the establishment of a new stand-alone department of climate change and energy efficiency, which will be headed by Penny Wong.

Mr Rudd has appointed Greg Combet as the new Minister Assisting the Minister for Climate Change and Energy Efficiency.

Peter Garrett. Photo: Justin McManus

This new department will be given responsibility for winding up the troubled insulation program and the roll-out of the new household renewable energy bonus scheme.

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Senator Wong will be Minister for Climate Change, Energy Efficiency and Water.

Mr Garrett will be the Minister for Environment Protection, Heritage and the Arts.

Mr Rudd said Mr Garrett’s passion lay with the protection of Australia’s natural resources and his reduced range of responsibilities would be more suited to him.

Under the changes announced by Mr Rudd, Mr Combet will be given the direct responsibility for the troubled insulation program.

Mr Rudd admitted the department changes were a demotion for Mr Garrett.

"This move is designed to achieve stronger co-ordination and greater efficiency in the development and delivery of climate change policies and programs, especially in relation to energy efficiency and renewable energy," Mr Rudd said.

"There’s absolutely no use sugar-coating the facts; there have been some problems in the implementation of this program, problems that as Prime Minister I have taken responsibility for and problems that I'm therefore responsible for taking action to fix."

By creating a single stand-alone department with a minister focused on the roll-out and implementation of energy programs, these arrangements will deliver better compliance management for the future, Mr Rudd said.

The Department of Environment will return to its core business of protecting the Australian environmental interests, he said.

Mr Rudd said: "There’s no point sugar-coating this; this does mean a different range and reduced range of responsibilities for minister Garrett. Let us simply acknowledge that fact. The core responsibility of the Department of the Environment should focus on the protection of Australian endangered species and the wider remit of environment protection, and that of course is where the minister’s passions lie as well."

The Prime Minister said that he had had a long conversation earlier this afternoon with "Minister Garrett" and said: "I indicated to him the course of action I’d be taking."

Mr Rudd said that Mr Garrett "accepted my decision. I indicated that's the decision I had taken. The minister accepted my decision".

23 Feb
The federal government has rejected suggestions it is using the public release of a counter-terrorism white paper later on Tuesday as a smokescreen for embattled Environment Minister Peter Garrett.